Less emissions, but increased total costs
Suzie Christensen, CEO, Lord Howe Island Board, The Lord Howe Island Signal. Update to an article in Renew Economy, Solar and battery microgrid saves Lord Howe Island $1.5m in diesel fuel costs in two years
The report highlights reduced use of diesel, which is great for the environment.
Average diesel savings in litres has been 389,946 per year over three years of operations and the four years prior on full diesel generation. That equates to roughly 1000 tonnes of CO2E emissions, a significant contribution from a small community.
The report has referenced projected cost savings based on projected diesel savings. However, the actual dollar savings are far less, largely because of a ‘minimum freight on diesel’ clause in the current marine freight contract.
The actual average diesel costs saving has been $387,358 per year due to the minimum freight requirements versus a potential average saving of $602,926 per year without the freight charge.
These figures also don’t account for an additional $126,000 in interest payments or the average increase of $639,752 per year in depreciation to replace the assets. Maintenance and salaries have remained stable.
Operationally, based on those averages, electricity generation and supply for the Island is 43 per cent more expensive than prior to the solar installation, even with the grant from [the Australian Renewable Energy Agency] ARENA. The Board’s electricity charges have only increased 10 per cent from 2021 to 2024 in that time.
An Electricity Strategy will be developed in the coming years, with a long-term focus on achieving affordable electricity for residents and businesses while striving to meet goals to reduce emissions.
This article appeared in The Lord Howe Island Signal, 30 September 2024.
